Guess what: Amazon isn’t just a retail/grocery giant. Or a cloud giant. Or a media/video giant. Or a logistics giant.
It’s also an advertising juggernaut.
Amazon’s advertising revenue is growing 60% a year, according to estimates. Analysts peg it at $4.5B+ for 2018, and it's already larger than Twitter and Snapchat’s ad business (see This Week In Data, below).
By putting advertising directly into the point where goods are sold, Amazon could:
- cut out ad agencies
- threaten the digital ad dominance of Google and Facebook (which faces other challenges as seen below)
- and further shift how consumer goods companies market themselves
That’s why Martin Sorrell of global ad conglomerate WPP has said in an earnings call that Amazon is “what keeps him up at night.”
You and just about every CEO, Sir Martin.
Amazon has been mentioned nearly 3000 times in earnings calls in the last year, according to our analysis of earnings call transcript data for 6500+ public companies. That’s more than Facebook, Apple, and Microsoft combined.
Have a great weekend.
P.S. We’ll be off on Monday for the Martin Luther King holiday in the US.
P.P.S. Tuesday, we're launching our CPG Insights newsletter. Sign up for it now.
This week in data:
- $7B: Monday marked the acquisition of cancer therapeutics startup Impact Biomedicines by Celgene, in a deal worth $7B. Impact Biomedicines had raised just $22.5M in total disclosed funding prior to the deal, and the acquisition is the biggest M&A deal in the cancer drug space since 2016 (when AbbVie bought Stemcentrx for $10B+). We recently mapped out the top exits in the cancer therapeutics industry over the past five years.
- $6.6B: According to a note by JPMorgan analyst Doug Anmuth, Amazon is well-positioned to emerge as the third "scaled digital ad platform" after Google and Facebook, with its ad revenue set to surpass $4.5B in 2018. Anmuth further notes that he “expect[s] Amazon’s ad revenue to grow rapidly over the next few years, reaching $6.6B in 2019.” Our Amazon Strategy Teardown digs into the e-commerce giant's history, top initiatives, and possible strategy for the future.
- $10B: File sharing and storage unicorn Dropbox has filed to go public confidentially, according to Bloomberg. Valued at roughly $10B, the company is backed by investors including Goldman Sachs and JPMorgan, both of which will reportedly lead the potential listing. We previously looked at Dropbox’s valuation in comparison to publicly-traded cloud storage and file sharing company Box to see how they stack up.
- 23M: Earlier this week, John Pace, a FedEx employee from Tennessee, discovered the largest prime number known to man. Pace found the number, which is more than 23 million digits long, as part of an online collective called the Great Internet Mersenne Prime Search, which organizes volunteers who run number-crunching software on their personal computers. Pace first joined the search 14 years ago.
- $5B: US Artificial Intelligence funding topped $1B every quarter in 2017. Compared to 2016, total annual funding increased 28% in 2017 with $5B across 444 deals. Q4’17 saw $1.2B in funding, with mega-rounds to Lemonade and Uptake Technologies. Read about this and more in our 2017 MoneyTree report released with PwC.
- $40M: The amount raised by web-based, collaborative design tool Canva in Series B funding from Blackbird Ventures, Felicis Ventures, and Sequoia Capital China. At a $1B+ valuation, the Australian company is the latest to make it onto our real-time Unicorn Tracker this week.
- 177: The Henley Passport Index, an annual ranking of passport power, came out with its 2018 rankings earlier this week. In first place: Germany, for the fifth consecutive year. A passport from the country grants travelers visa-free or visa-upon-arrival access to 177 countries, just one country more than the second-place Singapore passport. We recently released our state of travel tech report, which highlights other key travel trends, from most active investors to top online travel agencies' acquisition activity.
- -4.5%: Facebook’s stock is slumping, following the company’s announcement yesterday about changes to its prioritization of News Feed posts. Going forward, the platform will begin prioritizing posts from users’ friends over public content and posts from publishers, in a move that, according to Mark Zuckerberg, means “the time people spend on Facebook and some measures of engagement will go down.” With investors nervous at the prospect of reduced user engagement, the company’s stock had fallen 4.5% as of this afternoon.
- 500 pounds: This week, Boeing unveiled its “unmanned electric vertical-takeoff-and-landing (eVTOL) cargo air vehicle (CAV),” a drone capable of lifting up to 500 pounds. According The Verge, the drone (15 feet long, 18 feet wide, and 747 pounds) took only three months to design and build, and successfully completed initial flight tests. Check out our research on the 30 big industries drones could disrupt, from disaster relief to sports.
- 8: The number of members in Japan’s newest all-girl pop group Kasotsuka Shojo — which translates to “Virtual Currency Girls.” Each member represents a different cryptocurrency — Bitcoin, Ethereum, Ripple, etc. — each identified by a unique mask. The group’s first song is called “The Moon and Virtual Currencies and Me.” Check out our cryptocurrency explainers on Bitcoin and Ethereum (note: not pop band related).
- $100M: Cloud-based EHR company Practice Fusion was acquired by Allscripts Healthcare Solutions for $100M. The company last saw a valuation of $298M in November 2016 (down from $600M in October 2014), making it the latest exit to be featured on our Downround Tracker.
- 119%: Photo company Kodak became the latest company to ride the crypto wave with its announcement that it would launch Kodakcoin, “a photocentric cryptocurrency” aimed at helping photographers and agencies better manage image rights. Following the announcement, shares in Eastman Kodak Co. rose by 119% to $6.80. And photography isn’t the only sector blockchain technology could affect — we recently highlighted 30 other industries the tech could transform, from voting to ride hailing and more.
- $40M: Anomali, a cybersecurity startup offering predictive threat intelligence, raised a $40M Series D round this week from Lumia Capital. The company is also backed by In-Q-Tel, the CIA's venture arm, and Google Ventures, among others. We featured Anomali along with 29 other cybersecurity startups to keep an eye on in our 2017 Cyber Defenders Report.